Stocks stepped higher Tuesday, as homebuilder stocks rallied, retailers were mixed and online trading platforms saw some sharp early losses.
XToll Brothers' (TOL) third-quarter earnings report set off an early rally among homebuilder stocks. Medtronic (MDT) surged on its earnings. Retailer Kohl's (KSS) and cosmetics leader Coty (C) dropped hard, while TJX (TJX) gained following their results. Brokerages came under early pressure after reports that JPMorgan (JPM) was preparing a no-fee online trading service. Charles Schwab (SCHW) and E-Trade Financial (ETFC) fell hardest.
The Nasdaq Composite jumped 0.4%. The Dow Jones industrial average added 0.2%, while the S&P 500 advanced 0.3% in opening trade. Micron Technology (MU) and Netflix (NFLX) each rose more than 2% to lead the Nasdaq 100. Medtronic and TJX topped the S&P 500 index, while Coty fell to the index's worst decline.
S&P 500 Eyes Two Records, Dollar Slips
The S&P 500 is leaning toward new high ground, trading on Tuesday only 0.2% below its Jan. 26 record high. The index is also set to extend its bull run into record territory. At Tuesday's closing bell, the S&P 500's bull run will equal that of its run up to March 2000. Wednesday's session will mark the longest bull run in the index's history.
The Dow remains more than 3% below its January peak, and the Nasdaq is about 1.5% off its high from July 25.
The dollar slipped early Tuesday, on track for a fourth day of declines, with the euro rising to a two-week high, as President Trump criticized Federal Reserve policy ahead of the Fed's annual symposium in Jackson Hole, Wyo. Overseas markets were generally positive, with the Shanghai Composite closing up 1.3%. Meanwhile, Frankfurt's DAX and the CAC-40 in Paris rose more than 0.7% in afternoon trade.
Oil prices jumped, with West Texas Intermediate up 2.3% to just below $68 a barrel. Oil has climbed in three straight sessions since rebounding from support at its 200-day moving average. Copper gained 0.7% in early trade, looking to add a fourth day to its rebound from a 15-month low.
Toll Brothers Spikes, Medtronic In Buy Range
Luxury home builder Toll Brothers bolted 12% higher after delivering a strong fiscal third-quarter beat and raising its fourth-quarter guidance. The stock remains deep in an eight-month correction. Other homebuilders picked up on Toll's gains, with Lennar (LEN) rising more than 4%, and D.R. Horton (DHI) and PulteGroup (PHM) up more than 3% apiece.
Medtronic popped more than 4% following its fiscal first-quarter report. Earnings topped analyst targets. Revenue fell less than expected. Management held its full-year earnings guidance steady, but increased its outlook for organic revenue growth. The gain boosted shares beyond a buy range, above an 88.75 buy point in a flat base.
Discount retailer TJX jumped not quite 4% after scoring a broad second-quarter sales and earnings win. Management issued downside earnings guidance for the third quarter, based on impact from foreign currency and wage increase pressure. The company raised its full-year earnings guidance past analyst forecasts. Shares are up 38% for the year, and well extended from a December breakout.
Kohl's dropped 3%. The Menomonee Falls, Wis.-based chain reported above-expectation second-quarter revenue and earnings. But the midpoint of its full-year earnings guidance was below consensus targets. Shares closed Monday just below an 80.02 buy point in a first-stage cup base.
IBD 50 stock E-Trade Financial toppled 3.6%, and Charles Schwab fell 3%, after news reports detailed plans by JPMorgan to roll out a digital investing service bundled with free or discounted trades. The platform, which also includes a portfolio building tool and no-fee access to the company's stock research, is set for release next week, according to CNBC. JPMorgan shares rose 1.1%, trading just below a 118.39 buy point in a cup-with-handle base.
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